In 2011, Corporation M transferred 1,000 shares of its common stock to employee Y as a year-end bonus.However, Y will forfeit the shares if he leaves his position with the corporation before 2013.Y makes a § 83(b) election to include the $90,000 current value of the shares in his 2011 income.In 2013, Y is still working for Corporation M and his 1,000 shares are worth $230,000.Based on these facts

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When an employee makes a Section 83(b) election to include the value of restricted stock in income at the time of transfer, the employer is allowed a corresponding deduction in the same year for the amount included in the employee's income. In this case, Corporation M can take a $90,000 deduction in 2011, which is the year Y included the stock value in his income.

In 2011, Corporation M Transferred 1,000 Shares of Its Common